Isolation mode allows to list new assets as Isolated which has a specific debt ceiling and can be only used to borrow stablecoins that have been configured by Aave Governance to be borrowable in isolation mode. Debt Ceiling for an Isolated represented is the maximum amount in USD that can be borrowed against the collateral.
A user can supply an Isolated Asset just like any other asset using
supply()method in pool.sol, though, the default behaviour while supplying an Isolated Asset may vary based on below conditions
In case the user has other assets enabled as collateral, they can still supply Isolated Asset to capture the yield but won’t be able to use it as collateral
Borrowers using an Isolated Asset as collateral can only use that particular asset as collateral and can only borrow assets that are borrowable in isolation mode, i.e. have
BORROWABLE_IN_ISOLATION_MASKbit set in reserve configuration.
Borrower in Isolation Mode cannot enable any other assets including the other isolated assets as collateral.
Users can turn off isolation mode by disabling the isolated asset as collateral. This can be done only if the user has no outstanding debt. A user must use
repay()method in Pool.sol to pay off all of their debt before exiting Isolation Mode